What is Facility Management?
14 April 2020
Facility Management Group (FMG) is the first company in Azerbaijan to use professional terminology in its name with the aim of emphasizing its business profile in the area of management and operation of real estate. In developed countries, almost any commercial and non-commercial organization has business divisions related to facility management. This business area covers any form of real estate such as state and municipal institutions, universities, hospitals, business centers, residential buildings, large transport hubs - airports, train stations, etc. In the United Kingdom, experts are cited as saying that “Facility Manager is a person who wears many hats”, meaning that they should understand the principles of business administration, engineering, architecture, communication psychology and see things from a broader perspective when taking care of the safety of premises, improving the functionality of buildings and ensuring vital functions inside a facility.
Since 1990, Facility Management has been recognized as an academic discipline and has been an integral part of the curriculum of many leading-edge universities and colleges in the United States and Western Europe.
As an example, I d’ like to cite universities offering programs recognized by the International Facility Management Association (IFMA): Cornell University, Eastern Michigan University, Ferris State University (Michigan), University of Strathclyde-Center for Facilities Management (Glasgow), University of Southern Colorado.
The International Facility Management Association (IFMA) is a well-known international association with offices in more than 100 countries. The organization’s official website www.ifma.org provides information on over 23,000 official members available in the association.
There is also a huge number of professional organizations of facility managers as well as institutions and associations of commercial real estate that also consolidate this business area: Association for Facilities Engineering (AFE) (https://www.afe.org/), Association for Physical Plant Administrators ( APPA) (https://www.appa.org/), International Association of Museum Facility Administrators (IAMFA) (https://www.iamfa.org/), Restaurant Facility Management Association (RFMA) (https: // www .rfmaonline.com /), The Construction Specifications Institute (CSI) (https://www.csiresources.org/, Institute of Real Estate Management (IREM) (https://www.irem.org/), BOMA Institute ( https://www.boma.org/) and so on.
There exist dozens of western-oriented management companies in post-Soviet states; however, there is virtually no competition. There are only a few in Azerbaijan. The major competitor is the building owner, who strives to do everything on his own. At first glance, it may seem that these services are not in demand in our market, but this is not the case. The lack of interest in establishing such companies is due to the lack of clearly stated legislation and service standards, which greatly complicates the profitability of these companies. Accounts receivable, especially in the field of residential real estate, is a huge problem, since the payment mechanism and the list of services of the management companies are not legally stipulated, and are the subject of contractual cooperation.
In fact, as in any other field, the pace of business development at management companies will depend on the degree of openness in the marketplace, stability of economic and political situation in the country and emergence of competition among high-class real estate facilities that require a professional approach to both maintaining building infrastructure and optimizing financial flows.
In our market, the companies specializing in facility management solve most of the problems with the efforts of their own staff, and technically complicated works that require licensing are outsourced. The array of companies engaged in this type of business often includes those, which start from one type of business, such as cleaning or catering, gradually increase their staff and, as a result, expand the range of their services.
At this point, it is important to focus on the variety and specifics of the companies in the international arena that position themselves as facility management companies:
There are 4 types of activities in this area:
• Facility Management is a professional discipline that focuses on managing the infrastructure of real estate, ensuring functionality and improving the quality of life of people within the built environment.
• Building Management, as an integral part of facility management, implies the management of a particular building, often starting from the construction stage (involvement in the designing process to optimize future operation as well as accepting the facility for direct management)
•Property Management is the trust management of property, which, along with property maintenance, includes the management of rental sales.
• Asset Management is a discipline focused on the management of all assets, investment analysis, lending and determining the purpose of real estate etc.
In my next posts, I will write in more detail about these types of activities when elaborating the concept of facility management.